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Fed Opts Not to Raise Interest Rates
The Federal Reserve has elected to maintain its prime lending rates unchanged at 0.25-%-0.5% for now.
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The Federal Reserve has elected to maintain its prime lending rates unchanged at 0.25-%-0.5% for now. Rates have been at that level since the end of 2015, when the central bank signaled several small increases would be likely this year.
The Fed says risks to the U.S. economy have eased. But it notes that inflation, currently at 1.6%, remains below the Fed’s 2% target. Cheap energy prices are largely to blame, according to the bank.
Analysts consider the Fed’s position upbeat. They note that Fed Chair Janet Yellen had warned ahead of the U.K. vote to exit the European Union that such a move could have a “significant” impact on the American economy. The central bank appears to have eased its concern.
Many analysts say the Fed’s upgraded assessment of the economy makes a rate more likely when the bank meets in September. They doubt the Fed will would change rates at its November meeting because of the U.S. presidential election that month.
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